Onitap Resources (TSE) has hired legal counsel to defend itself against Exploration Orex (TSE), which is claiming damages for breach of trust, breach of fiduciary duty and injurious falsehoods at the Goldboro property in Nova Scotia. Claims against Onitap are “frivolous and wholly without merit,” concluded Onitap President Karl Naert in the company’s second quarter report.
Onitap sold its remaining 75% interest in Goldboro to Orex last year, in return for payments of $8 million over a 4-year period. According to Onitap, Orex failed to make a required $1.5-million instalment of the property purchase price by the July 1 deadline. Onitap has asked the Nova Scotia Department of Mines and Energy to retransfer the property to Onitap.
Orex is requesting a rescission of the original purchase agreement and a refund of the payments made to Onitap as part of the purchase price, claiming that Onitap has “interfered with Orex’s use and enjoyment of the property.” Alternatively, Orex will seek damages of $25 million related to exploration expenditures on the property.
“Their (Onitap’s) actions in the past have been injuring the credibility of the project to such an extent we had no other choice than to settle this one once and for all,” said Michel Roy, vice-president of exploration for Orex.
Meanwhile, a feasibility study to confirm the viability of an open pit operation at Goldboro continues. Roy said reserves in all categories have increased to 31.8 million tons grading 0.076 oz. gold per ton (2.59 grams per tonne). About 832,00 tons are in the proven category.
“The only problem we have right now, apart from the lawsuit, is that it looks like the going underground will not be viable from a mining point of view at this stage,” said Roy.
Originally, the company had anticipated a 2-phase operation, beginning with underground production and proceeding to open pit mining in the second phase. In order to begin underground mining as soon as possible, Orex had outlined a 1.18 million ton block grading 0.18 oz. per ton near the access ramp.
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